73 Union St Retail Pty Ltd v J&S Group Pty Ltd [2012] NSWADT 212

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: 73 Union St Retail Pty Ltd v J&S Group Pty Ltd [2012] NSWADT 212 Hearing dates: 20 August 2012 Decision date: 20 August 2012 Jurisdiction: Retail Leases Division Before: S Montgomery, Judicial Member Decision: The application for urgent interim order is dismissed. Catchwords: Retail Tenancy Claim - application for urgent interim order - third party affected Legislation Cited: Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Cases Cited: Evriparas Pty Ltd v ING Management Limited [2011] NSWADT 273 Beecham Group Pty Ltd v Bristol Laboratories Pty Ltd [1968] 118 CLR 618; [1968] HCA 1. Perhauz & Anor v SAF Properties Pty Ltd & Ors [2007] NSWADT 122 Protogeros v Fouzas [2004] NSWADT 62 Randi Wixs Pty Limited -v- Pokana Pty Limited (No. 2) [2003] NSWADT 4 Spuds Surf Chatswood Pty Ltd v P T Limited [2007] NSWADT 130 Category: Interlocutory applications Parties: 73 Union St Retail Pty Ltd (Applicant) J&S Group Pty Ltd (Respondent) Representation: H Soltan (Agent for Applicant) T Breene (Respondent) File Number(s): 125117

REasons for decision 1GENERAL DIVISION (S MONTGOMERY, (JUDICIAL MEMBER)): This is an application for an urgent interim order brought by 73 Union St Retail Pty Ltd ("the Applicant") under the Retail Leases Act 1994 ("the Act") in relation to premises known as lot 13 in Strata Plan 63800 ("the premises"). 2The Applicant seeks an order that J&S Group Pty Ltd ("the Respondent") give the Applicant possession of the premises immediately. 3The Applicant contends that it was in possession of the premises from 12 November 2011 to 11 July 2012 under an agreement in which the Respondent granted to the Applicant the right to occupy the premises. 4It further contends that a retail lease of the premises was created by virtue of section 8 of the Act and that by virtue of section 71 of the Act the Tribunal has jurisdiction with respect to disputes between the lessor and lessee of the retail lease. 5The application for original decision brought by the Applicant seeks the following orders: 1. A declaration that a retail lease between the Applicant as lessee and the Respondent as lessor was created on 12 November 2011. 2. A declaration that the first term of that lease is five years, the annual rent for that lease is $150,000 gross plus GST, the leased premises is lot 13/SP63800 excluding the parking space. 3. Alternatively if the tribunal cannot make order 1 above, a declaration that a lease was created where the Respondent is a lessor and the Applicant is a co-lessee with a nominee of the Respondent with other terms as per the lease tended to the Applicant by the Respondent's solicitor on 28 June 2012. 4. The Respondent to pay the Applicant $150,000 plus interest at 12% from 6 December 2010. 5. The Respondent to pay the Applicant's professional costs of and incidental of the proceedings. 6The application sets out the following background: 1. On 6 December 2010 the Applicant and the Respondent entered into a Loan Agreement and Call Option Agreement on the premises known as lot 13 in Strata Plan 63800 which is owned by the Respondent by which the Applicant leant $150,000 to the Respondent. The Applicant contends that this payment constitutes Key Money for the purposes of the Act. 2. Lot 13 in Strata Plan 63800 is a parking space as well as retail shop operated as a convenience store by 7 Eleven Stores with a lease to expire on 11 November 2011 with no option to renew. 3. The Call Option Agreement stipulates that the Applicant and Respondent - or its nominee - are to take possession of the premises after vacation by 7 Eleven Stores in order to establish a new business of convenience store where the Applicant contributes 30% and the Respondent contributes 70% of the cost of the set up capital of the business pursuant to clause 12.3 and 13.3 of the Call Option Agreement. 4. On or about 11 November 2011 the Respondent retook possession of the premises from 7 Eleven Stores pursuant to the terms of their expired lease. 5. On or about 12 November 2011 and pursuant to the Call Option Agreement the Applicant took possession of the premises in order to establish the business of convenience store in the premises. The Applicant's director Mr Haney Soltan took the key of the premises from the Respondent's staff/agent. 6. On or about 13 November 2011 the Applicant's director Mr Haney Soltan entered the premises - on behalf of the Applicant - using the key he has collected from the Respondent staff/agent the day before. 7. Over the following days the Applicant invited a shop fitting company named Global Displays into the premises to carry out the fit out necessary to the establishment of the business and made substantial payments to set up the business. 8. Furthermore and over the following days the Applicant's director placed stock orders with various suppliers such as C-Stores, lntertrading, Smith Chips, Zahab Confectionary, Streets Ice cream etc in order to obtain the stock needed to establish the business in the premises. In that process he obtained trading credit which he personally guaranteed. 9. The Respondent provided a bank trading account with Eftpos facility where some part of the turn over of the business will automatically be banked and used to pay the rent of the premises as well as some other expenses of the business such as insurance, telephone, Internet costs, rubbish removal costs etc. 10. On 19 November 2011 the business started trading having been setup and stocked by the Applicant. The Applicant appointed all staff/agents necessary to run the 24 hours a day 7 days a week operation of the business. 11. On 7 December 2011 the Applicant reported to the Respondent the cash and credit setup cost of the business as well as sales figures. At that time the Respondent did not contribute any cost of capital in setting up the business. However the Respondent alleged that he has paid 7 Eleven Stores $8,250 for a cool room they left behind. 7On 21 June 2012 the Respondent provided the Applicant with a copy of a proposed lease document in relation to the premises. Correspondence between the parties in relation to document followed. Some amendments sought by the Applicant were accepted whilst others were rejected. 8The Applicant contends that the parties reached a consensus in regard to the terms of the lease in a form prepared by the Respondent's solicitor and tended to the Applicant on 28 June 2012. 9On 12 July 2012 the Respondent demanded full possession of the premises from the Applicant's agent/staff Mr Ahmad Mustapha. 10The Applicant's director was away on holidays at the time and Mr Mustapha was unable to contact him to obtain immediate instructions. Mr Mustapha gave full possession of the premises to the Respondent's agent/staff Mr Alghoul. 11The Applicant's director subsequently advised Mr Mustapha that he would deal with the issue once he returned from his holidays. 12On 3 August 2012 the Applicant's director, along with Mr Mustapha went to the premises but were denied access. They were asked to leave the premises immediately and not to attend it ever again. 13The Applicant asserts that it is entitled to possession of the premises in the same manner as it was during the period from 12 November 2011 to 11 July 2012. The Applicant asserts that the Respondent has no legal basis to deny the Applicant access to the premises.